Achieving Cost Savings With Biosimilars Will Require New Strategies, Authors Say

January 20, 2020

Increasing trust in generics and biosimilars, and assuring their timely entry into the market, will yield greater benefit from these lower-cost options, according to a recent review.

Improving access to fairly priced, quality-assured generics and biosimilars is essential to realizing the potential public health and cost-saving benefits of these drugs, according to an editorial published in The BMJ, which also lays out strategies to achieve this goal.

In the publication, the authors point out that achieving universal health coverage requires universal access to safe, effective, quality-assured, and affordable drugs and vaccines, and they highlight the role of generics and biosimilars. The authors cite increasing trust in generics and biosimilars, as well as incentivizing the use of these lower-cost options, as needed improvements. However, they also acknowledge biosimilars have not realized the cost advantages currently associated with generics, at least in part due to the complex production processes and more extensive regulatory requirements biosimilars need for approval compared with generics.

The authors review the research on how policies used by health authorities aimed at reducing prices have worked thus far:

Internal reference pricing: Establishing groups of interchangeable drugs, each with a single reimbursement price, was found to decrease spending by leading patients to options at or below the reimbursement price. However, after the reimbursement price has been set, there is little incentive for manufacturers to drive prices below that point, which could limit potential cost savings.

Basing generic/biosimilar price on a percentage of the originator price: Similar to internal reference pricing, a fixed discount could discourage price competition. Plus, the price of the originator has a large influence on how well this policy works, the authors say.

Nonproprietary prescribing and generic substitution: The authors note that countries with mandatory generic prescribing or a high prevalence of generic prescriptions see substantial cost savings and that generics entered the market earlier in countries with mandatory generic prescribing.

Where nonproprietary prescribing is not mandatory, prescriber or patient perceptions about the quality of the generic compared with the originator may limit the utilization of generics. The authors suggest, at minimum, voluntary implementation of these policies where it is not feasible to make them mandatory.

For biosimilars, the situation is more complex since they are, by definition, “highly similar” as opposed to identical. Although biosimilars must establish no clinically meaningful differences from the originator before approval, the authors note the issue of switching patients to a biosimilar from their current reference product remains “the subject of debate.”

Tendering and pooled procurement: Generic prices can be reduced by pooling procurement. Tendering, in which suppliers must compete for contracts, has also been widely and successfully used to reduce prices; however, this can also drive small suppliers from the market, leading to decreased competition.

The authors conclude by stating that increasing trust in generics and biosimilars, and assuring their timely entry into the market, will yield greater benefit from these lower-cost options. Further, they note that efforts from all stakeholders are necessary ,as no single policy will achieve this goal.

For example, the authors recommend that governments carefully review pricing policies and grant priority review to the first generic, that payers provide incentives for pharmacists to dispense generics and biosimilars, that pharmaceutical companies either grant or take advantage of voluntary licensing, that physicians seek out evidence-based and independent information and prescribe the most cost-effective treatment, that physicians be involved in “switch studies,” and that government, physicians, and prescribers all help to educate patients about the safety and efficacy of generics and biosimilars.

Reference

Ferrario A, Dedet G, Humbert T, Vogler S, Suleman F, Pedersen HB. Strategies to achieve fairer prices for generic and biosimilar medicines. BMJ. 2020;368:l5444. doi: 10.1136/bmj.l5444.


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